■Daiki Axis ＜4245＞ Company Overview

2. Housing equipment related business

The sales composition ratio of the “housing equipment related business” in the first half of the fiscal year ending 2024/12 was 57.9% for construction-related companies, etc., 8.1% for home center retail products, and 34.0% for housing equipment division construction.

The predecessor Daiki started as a “tile and sanitary ware specialty store” when it was founded in 1958, and it has decades of experience in the wholesale housing equipment business. We sell plumbing housing equipment such as system kitchens, toilets, and unit baths to general contractors, local builders, and house makers. The trade area is centered around Shikoku, where the head office is located, and the Chugoku/Kinki region facing Setouchi, etc., and they have achieved high sales results within the same region, such as wholesale of interior and exterior materials, etc. for public facilities. We have pioneered new products that capture the needs of the times, and in recent years they have also been putting effort into proposing environmentally friendly products such as wooden water tanks and environmental pile construction methods. In addition, it supplies home center retail products to DCM Holdings group companies, and in addition to undertaking construction work for home center stores, it also sells and constructs materials and equipment for hotels, hospitals, educational facilities, etc. Since it is a wholesale business model, the profit margin is relatively low at about 1.5 to 2.7%, but we aim to improve added value and competitiveness by strengthening manufacturer functions, such as constructing a system to complete all processes in the wooden structure business in-house.

3. Renewable energy related business

The sales composition ratio of “renewable energy-related businesses” in the first half of the 2024/12 fiscal year was 89.8% for the solar power generation business, 8.0% for the biodiesel fuel-related business, 0.5% for the small wind power generation business, and 1.0% for the hydrothermal processing business. The development and management of wind power generation and solar power generation equipment was consolidated into DASP from 2019, and the business was integrated into DASP by transferring the company's biodiesel fuel-related business in 2021/7 and absorbing and merging the acquired Sanei Eco Home in 2023/1.

(1) Solar power generation business

In the solar power generation business, grid cooperation for power generation equipment installed by leasing and using the rooftops of 130 DCM Group stores was completed in the fiscal year ending 2021/12. It will be a long-term stable source of profit*.

* The amortization period for photovoltaic power generation facilities is 20 years (fixed price method) equivalent to the purchase period under the fixed price purchase system (FIT system). Also, the company has already prepared a budget allocated on a prorated period for removal costs 20 years from now.

In addition to sustainable business operations after the end of the FIT system, demand for various methods, starting with the PPA model*, is increasing due to heightened environmental awareness on a global scale. Following the acquisition of Sanei Eco Home in 2021, it acquired 100% of the shares of Medea, which is headquartered in Saitama City, Saitama Prefecture, in 2023/2 and made it a subsidiary. Medea's main business is the electrical construction business, which mainly designs, constructs, and maintains solar power generation equipment, and the electricity sales business at solar power plants owned by the company. The Group will build a system that can respond more quickly to requests from large power consumers by acquiring management resources related to solar power generation through active M&A.

* It is an agreement that provides operation and maintenance of solar power generation systems arranged by the company group free of charge, and power consumers purchase electricity generated by the company and pay the electricity bill for the amount used. As demand for electricity is increasing, mainly by large companies, to achieve carbon neutrality, we are focusing on it as a business model after the end of the FIT system.

(2) Biodiesel fuel-related business

The biodiesel fuel-related business began in 2002. Plant-based waste cooking oil used for deep-frying products etc. from general households, restaurants, convenience stores, food processing plants, etc. is collected, refined into biodiesel fuel, and reused as an alternative fuel for light oil, etc. The use of biomass energy using plant-based waste cooking oil as a raw material is considered to be “carbon neutral.” The company aims to realize recyclable energy from local production for local consumption, and is proceeding with the “Oil-More Project,” which promotes recycling of waste cooking oil while seeking participation and cooperation from local governments.

As a new development from 2023, DASP began supplying high-quality biodiesel fuel “D.oil” to airport work vehicles in April, which will be a demonstration test conducted by the Japan Airlines ＜9201＞ Matsuyama Branch. Even after entering 2024, “D.oil” has started being offered at the 4 airports in Shikoku, with Japan Airlines' Kochi Airport Station in January, Tokushima Airport in May, and Takamatsu Airport in June. Also, in the Nikko region, which includes the Okunikko area selected as a decarbonization advance area by the Ministry of the Environment, “D. oil” is provided for biofuel buses that began demonstration operation in 2023/8. Furthermore, a biodiesel fuel refining plant was completed in Ibaraki Prefecture in 2024/4, in order to plan a stable supply of biodiesel fuel in the Kanto region and further business development.

(3) Small wind power generation business

We entered the small-scale wind power business in the 2012/12 fiscal year. At the end of the 2021/12 fiscal year, DASP grid-connected small wind power generators at 12 sites, and FIT electricity sales began. Currently, 26 sites are in operation, and we aim to operate at 70 sites nationwide by the end of the 2025/12 fiscal year. Electricity sales revenue per site is expected to be 2 to 2.5 million yen, and an operating profit margin of about 25 to 30%. However, in fiscal 2018, the purchase price for the same category was revised to 20 yen/kWh equivalent to 20 kWh or more, so it is intended to be compatible with the new FIT with a 50 kW machine. If permission is granted, a 50 kW unit will be installed at a site of less than 20 kW. Installation costs are the same, but the policy is to take advantage of sales being 2.5 times higher.

In developing small wind turbines, Sylphide Co., Ltd. (now DASP), together with Zephyr Corporation, JATCO Co., Ltd., and Ricoh Japan Co., Ltd. (Ricoh ＜7752＞ group company) has been carrying out technology development and demonstration projects related to low pressure wind turbines since 2020. The purpose is to develop a new wind turbine with a rated output of 50 kW with high social acceptance based on regional disaster prevention measures, movements to create independent grids utilizing self-operated lines and existing distribution grids, and movements to self-consume renewable energy within business sites. Zephyr is responsible for the overall design of windmills, design of wings, field tests, and construction of windmill control algorithms; JATCO is responsible for developing automobile parts by converting them to wind turbines; Ricoh Japan develops maintenance support tools utilizing AI; and Sylphide (now DASP) is responsible for wing production.

(Written by FISCO Visiting Analyst Ikuo Shibata)